Megain Holding (Cayman) Co., Ltd. (MEGAIN) has signed two subscription agreements with Geehy International Limited (the “Offeror”) for the issue of 103.75 million new shares at HK$0.61 each.
Gross proceeds: HK$63.29 million; estimated net proceeds: HK$61.29 million.
Share placement size: 20.00% of MEGAIN’s existing share capital and 16.67% of the enlarged share base of 622.50 million shares.
Proposed use of net proceeds • R&D of chip and solution products – up to HK$30.64 million (50%) • Marketing and customer-base expansion – up to HK$18.39 million (30%) • General working capital – up to HK$12.26 million (20%)
Connected-transaction status Because the share subscription and an earlier share-purchase agreement were executed on the same day and are inter-conditional, the Stock Exchange has deemed Geehy a connected person under Listing Rule 14A.20. The new shares will therefore be issued under a specific mandate requiring approval by independent shareholders at an EGM set for 29 June 2026; the circular is scheduled for dispatch on or about 12 June 2026.
Parallel share purchase Geehy is also acquiring 211.00 million existing shares (40.67% of MEGAIN) from three vendors at HK$0.50 per share (total HK$105.50 million). The share-purchase completion and the subscription completion must occur simultaneously.
Post-transaction ownership • Geehy: 314.75 million shares (50.56%) • Vendors (collectively): 124.56 million shares (20.01%) • Public shareholders: 183.19 million shares (29.43%)
Regulatory implications Upon completion, Geehy will be required under Rule 26.1 of the Takeovers Code to launch an unconditional mandatory cash offer for all MEGAIN shares it does not already own or has not agreed to acquire.
Key conditions precedent still outstanding include (i) independent shareholders’ approval of the specific mandate, and (ii) Stock Exchange approval for listing and dealing in the subscription shares. Geehy has completed the necessary outbound-investment (“ODI”) approvals in Mainland China as of 30 April 2026.
Additional terms • Lock-up: Geehy is barred from disposing of any subscription shares for six months after completion. • Completion deadline: within seven business days after all conditions are met; both the subscription and the share purchase must complete on the same day.
Warning Completions may or may not occur; accordingly, the mandatory offer may or may not proceed. Shareholders and investors are advised to exercise caution when dealing in MEGAIN shares.